Yields fell on uncertainty over US foreign policy going forward, which will involve negotiations on trade, and with North Korea.
As inflation slowly makes its way into the supply chain, retail apparel prices increased 1.5% in February following a 1.7% rise in January, the U.S. Bureau of Labor Statistics reported Tuesday in its Consumer Price Index (CPI).
Footwear retail prices rose 1.5% in the month, with gains of 3 percent in women's and 1.8% in men's, and a falloff of 0.5% in boys' and girls'.
It still is the best of times for the USA economy for in spite of President Donald Trump's micro-management the S&P 500 index remains 3.4% in the green so far this year and 10-year bond yields have fallen from the 2.94% high recorded in late February to 2.84% overnight.
At 8:57 a.m. (1257 GMT), the yield on 10-year government notes was 2.846 percent, down from 2.870 percent at Mondayâs close. U.S. Treasury prices rose while stocks on Wall Street fell.
A survey of small businesses published on Tuesday showed the share of owners reporting higher selling prices in February hit its highest level since July 2014.
Federal Reserve Bank of Boston President Eric Rosengren recently said he expects "that it will be appropriate to remove monetary policy accommodation at a regular but gradual pace-and perhaps a bit faster than the three, one-quarter point increases envisioned for this year in the assessment of appropriate policy from the December 2017 [Federal Open Market Committee] meeting". The weekly average was up from 78.60 per pound the week before and further above the 74.84 cents per pound reported the corresponding period a year ago, USDA said. Its positive correlation with the core CPI suggests that this measure would remain below the Fed's 2.0% inflation target when the February numbers are released.
Gasoline prices fell 0.9 percent in February after rebounding 5.7 percent in January.
Fed officials target 2% annual inflation based on a separate index, the Commerce Department's gauge linked to consumer spending.
The CPI had risen 0.5% in January, its biggest gain in four years. Over shorter horizons, the core CPI has accelerated.
At a seasonally adjusted annual rate, the price index has gained 4.2 per cent so far this year, compared to a gain of only 3.3 per cent at the same point last year. Prices for hospital care fell 0.5 percent and the cost of prescription medication declined 0.4 percent. Food prices rose 0.2 percent in January. In contrast, the indexes for communication, new vehicles, medical care, and used cars and trucks declined over the month. The cost of motor vehicle insurance rose by a record 1.7 percent last month.